New Florida Mortgage Law Signed

With mortgage fraud continuing to rise throughout the country and the state of Florida ranking number one for its occurrence in 2005, Gov. Charlie Crist signed a new law last week intended to combat the problem.

Changes in lending rules will go into effect on October 1st of this year with the goal of making the mortgage lending process more transparent. Any person, including buyers, sellers and real estate licensees will be held accountable if they are caught knowingly lying, misrepresenting or omitting information a Lender would rely on in the mortgage loan process.

The new law requires the following lending practice changes:

• New more detailed disclosures for loans, including variable rate (ARM) loans.
• Mortgage Brokers must disclose to their Borrowers how much the actual Lender is paying them for originating the loan and it must be in writing.
• Good faith estimates must be signed and dated by the borrower, and disclose the recipient of all fees charged. Recipients may be described in generic terms i.e. Title Company.
• If the original loan terms change, the Lender/Broker must notify the Borrower at least three days prior to closing. The mortgage licensee will be required to have proof of such notice and that the new terms where accepted by the Borrower.

Oversight will be provided by the Florida Office of Financial Regulation and violators could face fines and/or loss of their mortgage license.

For more information or questions, please contact us at Metro Mortgage Company.

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